Air Pollution, Government Pollution Regulation, and Industrial Production in China
Posted: 21 Jun 2019
Date Written: June 19, 2018
Abstract
Over the last two decades, a severe deterioration in air quality has accompanied China’s rapid industrialization. As a result, the Chinese government has been implementing stricter air pollution regulations and controls. In this paper, we create a measure of government policies on air pollution by tracking all government pollution-related announcements in Chinese newspapers. We then use this variable, along with measures of actual pollution across five major cities in China to investigate how pollution, industrial production, and the government policies on pollution are interrelated. A vector auto-regression analysis suggests that on the whole level, government policies seem to decrease air pollution without significantly affecting industrial production, but the results appear to be short-lived, dissipating eight months later. But different cities have different relationships among these variables. When there is air quantity decrease, government in city like Beijing seem to have a feedback on this. And government policies seem to decrease air pollution. Governments in cities such as Shanghai and Guangzhou have react to the air pollution. However, government policies seem do not have any effect on air pollution decrease. Governments in cities such as Chengdu and Shenyang have no enough react to the air pollution. And government policies seem do not have any effect on air pollution decrease.
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